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TOPIC: ARGUMENT22 - The following appearedin a memo from the president of a company that builds and sells new homes in Steel City.
"Over the past five years, thepopulation of Steel City has increased by more than 20 percent, andfamily incomes in Steel City have risen muchfaster than the national average. Nationwide, sales of houses priced above$150,000 have increased more than have sales of lower-priced houses. Such dataindicate that we should make changes in our business to increase company profits.First, we should build fewer low-priced houses than we did last year and focusinstead on building houses designed to sell at above $150,000. Second, weshould hire additional workers so that we can build a larger total number ofhouses than we did last year."
WORDS: 319(332)
TIME: 00:30:00 +5min
DATE: 2010/8/24 23:58:12
The president of the company concerns thatthe profits will increase with the help of 2 changes: build fewer low-pricedhouses and focus on the houses priced above $150,000; hire more workers tobuild more houses. I have to say that the president's decisions are not cogentenough though he thought they were.
To increase the profits, we should considerthe cost. Without calculating the cost of high-price houses, just focus on theincreased sales, the final profits of the houses priced above $ 150,000 can notbe made out. Further, all the data is nationwide, which means that, the salesdata of Steel City is not sure. Maybe citizens preferthe lower-priced ones. The president quote the increasement of population of Steel Cityand the rise of family incomes in SteelCity to demonstrate that people livein Steel City will purchase high-price houses.But there is no survey or any other types of data show that there areconnections between them. Perhaps, citizens spend much money on travelling oreducation but only a little on housing. Another explanation is they have enoughbig and comfortable houses to live in. So, why should they buy a new one?
After the analysis, the president's investmentreason is not sound. He wants to hire additional workers to build a largertotal number of houses, which probably led to a big failure. Because there isno information showed that these new built houses including the high-pricedhouses and the low-priced ones will be sold out. Even fortunately, they aresold out, as I expressed above, without concerning the cost, which does meanmore profits. Perhaps It will cost more money to hire the additional workersbecause of the stress of employment market. That's the core problem should beemphasized by the president.
My suggestion for the president is: beforemaking any decisions, make sure the survey data is reasonable enough to provethe investment, especially about the total cost, purchasing power, market dataand trends.
来不及啊来不及。。。
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